Trade Unions Raise Concerns Over Danantara: Hidden Privatization and Energy Transition Challenges in the Spotlight”

As many as 50 leaders from SP PLN, PP-IP, and SPNP, along with the Center for Economic and Law Studies (CELIOS) and the National Welfare Movement (GEKANAS), gathered for a workshop titled “Analysis of Danantara from the Perspective of SOE Assets and the Implementation of the Just Energy Transition Partnership.” Held at Hotel Aryaduta on Wednesday, May 28, 2025, the workshop brought together key stakeholders to discuss pressing issues in the energy sector.

Indah Budiarti from PSI explained that this workshop was aimed at understanding better both legal and economic aspects of Investment Management Body Daya Anagata Nusantara (hereafter, Danantara) and its impact on the future of Indonesia’s electricity. She asserted the need for trade unions to take a strategic step in their advocacy and campaign efforts in responding this new policy. Danantara is a new Invesment body established in October 2024 and inaugurated by President Prabowo Subianti in February 2025.

General Secretary of PPIP, Andy Wijaya, in his introduction said, “Danantara was established to manage state’s assets, particularly in SOE sector, however, it is ironic that Danantara is not part of the state administrator. This means that Danantara management is not subject to supervision mechanisms that apply to all state financial administrator.”

The legal basis for Danantara establishement is Law No.1 of 2025 that is the Third Amendment to BUMN (SOE) Law, and also Government Regulation No. 10 of 2025 and President Decree NO. 30 of 2025. Dananta has a unique structure, it manages state’s wealth, but it is not part of the State Administrators. It means Danantara managers are not subjected to supervision mechanisms that apply to other public officials, although they manage a massive amount of state asset.

Andy also highlighted the changed definition of privatization in the new law. The definition opens an opportunity for SOE’s share to be sold to private entities. This raised concerns on the expansion of privatization that will also include state’s strategic assets without transparent mehanisms and lack of accountability.

In the context of energy transition, he also highlighted the discrepancy between national energy mix and  oversupply of electricity by 56% (2022).  that is currently roughtly 56% Dalam konteks transisi energi, disoroti pula ketimpangan bauran energi nasional dan oversupply listrik hingga 56% pada 2022. The price of electricity produced by IPPs (Independent Power Producer) is so much more expensive than that of PLN’s subsidiaies. This not only put more burden on the State Budget (APBN) but also reinformce the argument that privatization in power sector is unable to answer the challenges of just energy.

“The change on the definition of privatization in the revised BUMN Law is the law basis for Danantara establishment and opens an opportunity for SOE share to be sold to private entities. This raises concern on the extension of privatization to include strategic assets secretly, without accountability,” added Andy.

The director of CELIOS, Bhima Yudhistira, explained that Danantara was established in a very narrow state fiscal space, high maturity debt, declining income. “All SOE devidents will go into Danantara, but subsidies and compensations will still be shouldered by government budget. This creates a confusing dualism,” Bhima asserted.

He reminded partiipants that several SOE assets have been used as collateral, put more risks on the state finance, particularly if these projects fail. In addition, this scheme violates the zeal of Law No. 17 of 2003 on State Finance as Danantara’s loss will not be categorized as state loss. It means that there is not any accountability mechanism in place.

In energy sector, CELIOS noted that Danantara bears the risk of increasing Indonesia’s power sector’s dependency on coal and gas. The latest Electricity Supply Business Plan (RUPTL) still encouraged fossil fueled electricity generation, although Indonesia needs to expedite the energy transition towards clean energy. In supporting the just transition, CELIOS recommended that Danantara to adopt transparent practices just like Temasek in Singapore and also guarantee the fulfillment of electricity workers rights.

Although the Government of Indonesia stated its committment to energy transition towards clean and sustainable energy, the 2025 Electricity Supply Business Plan (RUPTL) shows an opposite reality. Based on the Ministry of Energy and Mineral Resources data, the plan to add capacity in the future will significantly rely on fossil sources.

The planned new capacity to be added by 2050 is 69.5 GW. Of this total, 42.6 GW—or 61%—will come from new renewable sources. Solar energy will be the backbone, contributing 17.1 GW, followed by hydropower (11.7 GW), wind (7.2 GW), geothermal (5.2 GW), bioenergy (0.9 GW), and nuclear (0.5 GW). Meanwhile, an additional 10.3 GW will come from energy storage systems, such as pumped storage and batteries, which will be essential for maintaining the stability of a renewable-based electricity grid.

However, what concerning is the plan to build new 16.6GW fossil energy generation capacity – consists of 10.3 GW of gas and 6.3GW coal – included in the long-term projects. This means that 24% of new additional capacities contribute significantly to the carbon emission and also climate crisis.

“This situation indicates the potential lock-in effect on fossil energy infrastructure in the long term. Once the coal and gas fired power plants built, it will be difficult to stop their operation before their life end in 30 to 40 years. This is inconsistent with the net zero emission target and the government’s zeal for just energy transition,” he added.

According to Bhima, it is important for trade unions and general public to ensure that workers rights are protected and not abandoned in the name of efficiency or corporate synergy. First, PLN’s labor policy that is now under Danantara’s control must be studied critically, particularly in their relation to Collective Bargaining Agreement (CBA). The change in management structure must not risk workers’ basic rights.

Second, it is important to prevent PLN’s divident flows as subsidy to other unhealthy SOEs. Divident should be used to strenthen and modernize national electricity system, not to be the victim of synergy illusion between SOEs.

Third, the restructurization steps must be done in a transparent way, without any adverse impacts on job security. Workers must be involved in the planning process so that unilateral termination or employment status alteration can be avoided.

Fourth, trade unions must reject all forms of privatization of PLN’s assets carried out under divestment and acquisition schemes aimed at rescuing projects that are not relevant to PLN’s core business.

Fifth, workers’ reskilling and upskilling must be the priority in supporting the energy transition to clean energy. Workers must not be left without relevant skill amidts the changes in technologies and energy system.

Sixth, bonus and benefit structure must refer to the best practices in SOEs, althouth PLN is under Danantara. The degradation of welfare standard will demotivate and lower workers’ loyalty.

Seventh, PLN’s strategic assets must not be used as collateral for other SOEs to get loan. This step bears a big financial risk. It also threatens the sustainability of vital public services provision.

To close the workshop, Andy Wijaya asserted that, “Trade union must ensure tht the energy transition is constitutional, affordable, sustainable, and safe for the people and the environement.” This is our reminder that energy transition is not just a technocratic agenda. Energy transition is social and political process taht concerns with peoples’ basic rights, particularly the working people, who are the main movers of energy.

Energy tansition must comply with Article 33 of the 1945 Constitution: Sectors of production which are important for the country and affect the life of the people shall be under the powers of the state and shall be used to the greatest benefit of the people. It means, the energy transition must not be the door for a covert privatization or market liberalization that rist the public.

Meanwhile, the “affodability” aspect is crucial as energy is a basic need. If energy transition leads to expensive electricity tariff, people will bear all burden to the transition. The affordable energy is a prerequisite of social justice.

The sustainability mentioned above is not just concern the environment, but also social and economic sustainability. Energy transition must create geen jobs, ensure reskilling for workers in place, and protect the job security. The “safe for the people and the environement” means that energy policies must prioritize the work safety, free of polution, and aware of its impacts on general public.

During his session, Bhima Yudhistira proposed to establish a Danantara Watch an independent monitoring mechanism that involves trade unions. The objective is to ensure transparency, prevent any abuse of state asset, and protect public interest in the management of state asset by Danantara.

The proposal received a positive response from the participants. Trade unions view the establishment of Danantara Watch as a strategic and concrete step that should be implemented without delay. This aligns with trade unions’ mission to uphold accountability and advocate for workers’ rights amid the ongoing restructuring of State-Owned Enterprises (SOEs) and the transformation of the energy sector.

“We cannot afford to only react after a policy is implemented. There must be mechanisms that enable us to proactively monitor developments, raise objections, and participate in decision-making from the outset,” proposed a participant.

With Danantara Watch, it is hoped that state asset management will align with constitutional principles. Amidst the risks of privatization and growing worker uncertainty due to corporate restructuring, an alternative monitoring body is urgently needed.